Internal auditing in the public sector has a recent history as it was in the early 1990s when Government focused particularly on this domain.

Internal audit was first introduced in a decentralised manner in Government in 1992 when every Ministry had its own internal auditor and the Ministry of Finance assumed an overall co-ordinating role. As a result of the public service reform initiatives launched in 1998, a strategic framework was drawn up for the re-engineering of the public internal audit function. A Financial Management Reform Task Force (1998) had made three key recommendations as follows:-

• Centralisation of the service-wide internal audit effort;
  
• The establishment of a new professional class of internal auditors to be managed by a new Directorate;
  
• The creation of a regulatory board, which would deal with the Internal Audit function within Government.

Soon after, more particularly in year 2000, a new Directorate, namely the Internal Audit Directorate was set up with an Internal Audit Board for overseeing the Directorate’s operations. Few months later, the Government deemed it beneficial to have the same Directorate cover also the investigative requirements for public funds. Consequently the Directorate assumed also the responsibility of performing financial investigations and its name was changed to Internal Audit and Investigations Directorate.

In 2003, the responsibilities and powers of the IAID were entrenched in the Internal Audit and Financial Investigations Act (Chapter 461 of the Laws of Malta). This legislation was enacted specifically to provide the Directorate with strict functional independence from Ministries, other departments and divisions. The law made it outright clear that the IAID is answerable to the Internal Audit and Investigations Board (IAIB) headed by the Secretary to Cabinet. Drawing from the private scenario, the Internal Audit and Investigations Board is in fact the Government’s audit committee; where the Secretary to Cabinet reports to Cabinet which is so to speak the ‘Board of Directors’ to Government.

Over the years, the Government has heavily invested in this Directorate mainly by employing fully qualified accountants and auditors who further specialise in internal audit aspects. The entire complement of the IAID to date totals 20.

Government’s commitment to internal auditing is also reflected in the fact that it is providing its full support to this internal audit forum initiative and it is to be noted that the Director General of the Internal Audit and Investigations Directorate is herself a member of the Founding Committee.

Internal auditors around the world are under intense pressure to perform at the highest level – both by regulators and by their own organizations. These are global trends, but they play out just as intensely in Malta. This is viewed as an opportunity for IAID as it entails striving to keep on engaging motivated and self driven qualified auditors.